The head of Saudi Arabia’s Public Investment Fund has been subpoenaed in litigation over a 2018 tweet by Elon Musk claiming he had “funding secured” to take Tesla private.
Tesla’s legal team served papers to an office administrator for PIF governor Yasir al-Rumayyan on December 19, according to court documents filed in California federal court on Tuesday. Defendants in the case, which include Tesla chief executive Musk, are seeking to have al-Rumayyan, who is also the chair of Saudi Aramco, testify at the trial, which is scheduled to start in San Francisco later this month.
Any eventual testimony from al-Rumayyan could focus on discussions the PIF had held with Musk before his “funding secured” pronouncement. The investors who brought the lawsuit claim Musk manipulated Tesla’s stock price when he tweeted in August 2018 that he had financing in place to take the carmaker private at a price of $420 per share. A deal never materialised.
Musk has previously said, in public appearances and in court documents, that a “handshake” deal had been reached with al-Rumayyan and the fund to stump up the money required to take Tesla off the public markets.
But filings in the case have revealed how the relationship between Musk and al-Rumayyan broke down following a Bloomberg article stating the PIF was merely in talks over the go-private idea.
“You said you were definitely interested in taking Tesla private and had wanted to do so since 2016,” Musk wrote to al-Rumayyan in a text message exchange on August 12 2018, published in court filings, saying he had been thrown “under the bus” by a “weak sauce” statement issued by the PIF in response to the story.
Musk added: “You also made it clear that you were the decision maker, moreover backed strongly by the Crown Prince, who regards this as strategically important at a national level.”
In response, al-Rumayyan wrote the fund had not received required financial information from Tesla, and that it “takes two to tango”.
“Let’s see the numbers and get our people to meet and discuss. We cannot approve something that we don’t have sufficient information on,” al-Rumayyan wrote, adding: “I am your friend. So, please don’t treat me like an enemy.”
With financing falling through, Musk looked to other outside investors to take Tesla private — but within two weeks had abandoned the idea.
Musk’s legal team did not respond to requests for comment on the subpoena. Three other PIF executives were also served, according to court filings. The PIF said it had no immediate comment.
A trial is set to begin January 17 and last about 10 days. Among the potential witnesses are Musk; members of Tesla’s board, its chief financial officer and head of investor relations; and Silicon Valley figures such as Silver Lake managing partner Egon Durbin, and Oracle co-founder and Musk confidant Larry Ellison.
The “funding secured” tweet has proven costly for Musk. He and Tesla each paid $20mn to settle legal action from the US Securities and Exchange Commission. Musk also had to resign as Tesla chair, although he kept his position as chief executive.
Tesla shares fell 12.2 per cent on Tuesday, following the disclosure of lower than expected vehicle deliveries in 2022’s final quarter. The share price is down nearly 72 per cent over the past 12 months.
Additional reporting by Samer Al-Atrush in Dubai